This Is Deadline Week for Credit Card Change

Soon merchants who cannot process chip-enabled MasterCard and Visa cards could become liable for fraudulent transactions at their stores.

The USA certainly has a complex debit environment, so it’s no surprise that debit is something that’s taken a little bit longer to get up and running.

Starting Thursday, retailers across the US are required to accept new EMV debit and credit cards.

What happens on October 1st? They’re being pitched as an important step forward in credit card security.

The site clarifies its statement using the following example. If someone makes fraudulent charges with your card, the rules do not change from before. Not changing the POS system allows a counterfeit card to be successfully used at the merchant’s checkout. That being said, “The consumer is not responsible for fraud”.

Security experts said as long as a magnetic stripe is on the back of a chip card, a thief can still “skim” a customer’s card information from it.

Why a magnetic stripe and a chip? Instead, banks and financial institutions began sending chip-embedded credit cards their clients can use for shopping and other transactions. What’s that about? A few transactions may not require either. So, for the foreseeable future, consumers will have to guess whether to swipe or dip.

As a business owner or merchant, if you don’t have EMV enabled payment equipment, please talk with your payment provider about options. Chip and signature? “Criminals will know which stores have either not yet implemented the EMV terminals or they will learn how to damage the chip in the EMV cards they have spoofed so that it forces the retailer to perform the traditional swipe if they want to make the sale”, he wrote in an email. “The product offers feature rich technology providing enhanced cardholder experiences and added security benefits”, says Madeline K. Aufseeser, senior analyst with Aite Group. In response, Conroy quotes a card issuer, “We don’t really think we can teach Americans to do two things at once”.

5) Shift in liability for businesses. You need to wait to insert the card in the reader until all your items are rung up. Many businesses won’t make the deadline – for any number of reasons, including apathy and lack of awareness – but many will. That’s why you might have seen strange-looking new terminals at your favorite store and why you might have received one of these new cards in the mail.

Chip and PIN could be considered two-factor authentication, whereas Chip and Signature is one factor.

On Thursday, however, merchants are expected to meet a deadline to update their point-of-sale card readers to accept the new chip cards, which are created to add a layer of protection from fraud. People will still sign for their purchases, typically, and not use a PIN with the chip credit cards.

It’s still going to take time to get the chip cards into the hands of consumers, too.

So if a bank didn’t issue an EMV card, it would be on the hook for any fraud that occurs.

“Unfortunately, the chip technology does not apply to online purchases, where the physical card is not used in the transaction”.

For that matter, neither will retailers for failing to upgrade their systems to accept the new cards, although they’re on the hook in another way. The remaining 9 percent said they were unfamiliar with the security chip. Historically, countries adopting the technology experienced stark declines in counterfeit card fraud, but witnessed sharp increases in CNP fraud. Well, maybe. There are those who disagree, arguing that relying on signatures instead of PINs keeps the bull’s eye right where it is.

Chip-and-PIN technology is used more broadly overseas, and is considered safer since a PIN is harder to falsify. A few banks are reissuing chip cards as credit cards reach expiration dates; others are rolling out cards in batches.